July 15, 2007	Sunday	Jamadi-us-Sani 29, 1428

NEW YORK, July 14: The dollar lost value against other world currencies on Friday after a government report revealed a surprise decline in US retail sales last month. The report, which showed a 0.9 per cent drop in retail sales for June, heightened concerns about US economic growth and lessened the odds of US interest rate hikes anytime soon.

The euro was trading at $1.3781 around 2100 GMT, little moved from $1.3787 late Thursday, but the euro had shot over 1.38 dollars in earlier activity for the first time since its creation in 1999.

The euro breached the $1.37 level for the first time on Tuesday and has increased over one percent against the dollar in the past week. The dollar meanwhile weakened against the British pound and the Japanese yen.

Bearish undertones continued to plague the US dollar during the New York session following rather lackluster US economic reports, said Richard Lee, a currency analyst at Forex Capital Markets. More bad news for the greenback, said CIBC economist Audrey Childe-Freeman.

Overall, a weaker than expected performance for the US retail sector and while the poor weather (and higher gasoline prices) may have something to do with it, this remains a soft data, Childe-Freeman observed.

The dollar stumbled after the Commerce Department said retail sales fell by the biggest margin in almost two years in June as American consumers cut their spending amid a persistent housing slump.

Stripping out vehicle sales from the June report, retail sales dropped 0.4 percent. Most analysts had expected sales excluding autos to rise 0.2 per cent.

The surprise decline in retail sales, the sharpest since August 2005, is likely to disappoint the Federal Reserve which is banking on improved economic performance after US growth slowed to 0.7 per cent in the first three months of 2007.

However, US stock market investors appeared to brush off the retail sales news, as they pushed the Dow Jones Industrial Average to a record closing high above 13,900 points.

But the euro has also risen to record highs against the dollar because growth in the eurozone is widely expected to outpace other major economic powers such as the US and Japan this year.—AFP